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ATON - Daily Dashboard, Economics - Dec 4, 2012.


Has PMI Ceased to Provide Accurate Guidance of Actual Production?

Russian manufacturing PMI edged down to 52.3 in November from 52.9 in October, according to Markit Economics yesterday (3 Dec). However, the indicator remains well above the 50 threshold, pointing to a solid expansion in output.

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The main contributor to composite PMI dynamics was an increase in new orders, signalling some stabilisation in demand. However, manufacturers remain cautious about the sustainability of demand, as indicated by a modest contraction in sector employment. Though price indices (for intermediate goods, as well as finished products) revealed no acceleration in November, the rising pressure on productive capacity, highlighted by a number of managers, raises inflationary concerns.

Finally, the correlation between official industrial production data and PMI values has declined in the last few months. Industrial output added approximately 2.0% YoY on ave rage dur ing the last three months, and the indicator continues to trend down in the medium term. PMI data may thus provide poor guidance for future industrial production dynamics, so a positive PMI result is not enough to ease concerns about an economic slowdown in Russia, in our view.


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Publication:Russian Banks and Brokers Reports
Date:Dec 4, 2012
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